CUC told to award 60MW power plant to next bidder

The Commonwealth Utilities Corporation was ordered to award the multi-million 60-megawatt Saipan power plant to the next lowest bidder to jump-start the project and thwart possible legal consequences.

Legislative leaders cautioned CUC officials not to waste time and begin talks with Tomen Consortium as required under the terms of Public Law 12-1.

Any delay is seen to result in another possible lawsuit, which in the end will be against the best interest of the utility corporation and Commonwealth consumers.

In the next 30-days, CUC should be able to wrap up negotiations with Tomen Consortium and forge a contract as stated in the existing procurement regulations.

Sen. Ramon S. Guerrero advised CUC Board Chair Jesus T. Guerrero to negotiate the project with the next lowest proposal on the RFP requirements, based on the CUC procurement policy.

He said the corporation should heed the proper procedural steps for the next negotiation of the 60-mw power plant proposal and award the project to the next lowest responsible bidder.

“Let us be mindful that you nor the board cannot change the specification as mandated by PL 12-1. What you have maintained with the Enron mechanism must follow the next in line offer,” said the senator.

The consortium’s legal counsel Robert O’Connor agreed that CUC is required by the procurement regulation to meet with the next lowest bidder and start contract negotiations immediately.

He said Tomen is the only company which is actually pursuing the construction of the multi-million power plant which will benefit thousands of CNMI residents in the future.

Tomen Consortium is in fact, $24.5 million cheaper than the Houston-based Enron and logistically closer to the Northern Mariana Islands.

“There will be less problems with the consortium, there will be no shipping problems, it is closer and cheaper. This is a good news for Commonwealth consumers,” said the legal counsel.

The collapse of CUC-Enron talks paved the road for the corporation to seek alternatives amid negotiation problems and frequent off-island travels.

Further, Mr. O’Connor said the entire landscape of the current court case filed against the utility corporation will be virtually changed, to the advantage of the CUC.

Meanwhile, consortium lawyer Steve P. Pixley said the complaint for judicial review of agency action is currently filed at the Superior Court while an opposing motion to dismiss was launched early this month.

According to Mr. Pixley the decision of CUC denying the protest filed by the Consortium and awarding the contract to Enron was arbitrary, capricious, an abuse of discretion or otherwise was not in accordance with applicable law.

Further, CUC’s decision was made without observance of procedures mandated by applicable laws and unsupported by substantial evidence.

Earlier, Enron and CUC firmed up gray areas in the negotiation of the 60-mw power plant project when out of nowhere the Texas-based company backed out from the negotiating table.

Reports claimed failure to reach a compromise on the financial terms of the project contract was one of the primary reasons that lead to the collapse of the talks.

In addition, Enron and other US-based power companies had been advised by US energy officials to concentrate on providing additional power needs to mainland areas by putting up between 65-95 power plants within the next ten years. (EGA)